by John Keller | Feb 3, 2015 | Customer News, Fuel Price Management, Fuel Pricing Software, Fuel Pricing Technology, Industry News
According to Convenience Store News, longtime PriceAdvantage customer Royal Farms has opened a new location in Delaware, near the headquarters of Wawa. This is the first Royal Farms location in Delaware County, where Wawa is based. Royal Farms operates 160 Convenience Stores across the east coast.
Royal Farms Marketing Manager said “Every market we move into, we have had competition. And it’s not just from other convenience stores. It’s from grocery stores and fast-food restaurants.” Royal Farms President John Kemp attended the grand-opening event and presented donations to seven local charities.
Royal Farms has been using PriceAdvantage as their fuel price management system integrated with their Skyline Products electronic gas price signs for over seven years. Rob Rinehart, Director of Retail Petroleum had this to say:
“It is a penny up and penny down game. PriceAdvantage presents information to me in a simple and easy way so that I can review each store quickly to determine what price I want posted at the street in the next half an hour. We achieved a return on our investment in 12 months.”
Read more about their solution here.
by John Keller | Feb 2, 2015 | Fuel Price Management, Fuel Pricing Software, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
Brian Milne, the Energy Editor at Schneider Electric presented some interesting statistics today, via Convenience Store Decisions. Here are the highlights:
- Wholesale spot market is up
- US Crude production growth is predicted to continue
- The traditional trend of the spring season is set to reverse the current 17 week string of declines in US retail gasoline prices
- Futures contracts are at a two year high pointing to expected gasoline price increases
- Amount of gasoline supplied to the primary market is higher than last year and five years ago (consumer demand is up)
- The highest two weekly averages of the year for gasoline supplied to the primary market were the last two weeks of the year
- Oil prices continue to drop on NYMEX
The seasonal trend of every spring time involves the transition from winter blends to summer blends, scheduled refinery shutdown due to scheduled maintenance, and anticipated increased volume usage as the weather improves and consumers drive more.
What does this mean from a fuel price management perspective?
We should see the increase in wholesale prices that we always see this time of year, even if oil prices continue to decline. That means strong retail fuel margins will be hard to come by. As NACS reported in their consumer survey today, consumers are willing to drive five miles out of their way to save five cents per gallon, and 65% of those surveyed said they had taken advantage of a discount such as a loyalty program.
We should also see a prolonged increase in retail fuel volumes as consumers are willing to drive more at current prices.
by John Keller | Jan 9, 2015 | Fuel Price Management, Fuel Price Optimization, Fuel Pricing Strategy, Fuel Software, Retail Fuel Margins
The OPIS report today revealed the average retail fuels margin across the US was $0.288 per gallon, down $0.047 from last week.
That is the third consecutive weekly decline, but the US retail average is still nearly double the margin of the equivalent week last year when the retail fuels margin was $0.146 per gallon. The six week average remains at a robust $0.326 per gallon. This is the fifth consecutive week when the six week average increased.
Last year at this time the retail fuel margin average bumped along the bottom until breaking above $0.20 per gallon the first week of March.
Perhaps the continued margin average decrease over the past three weeks is an indication that fuel marketers are now vying for volume and willing to sacrifice some of their margins. Only fuel pricing software like PriceAdvantage can allow the savvy fuel analyst to play the volume / margin game and make the most profit during these turbulent times.
by John Keller | Jan 7, 2015 | Fuel Price Management, Fuel Pricing Strategy, Industry News, Retail Fuel Margins
Today the Wall Street Journal reported that US Inventory data predicts gas prices will continue to fall. The article refers to a report that oil and fuel supplies have risen to a record high, pushing gasoline futures to a near six year low.
US stockpiles of crude oil and refined fuels are at the highest level ever, dating back to 1990. In addition, US consumption of petroleum fell slightly. “Gasoline inventories rose by 8.1 million to 237.2 million barrels, the highest level since February 2011, according to the EIA. Analysts expected an increase of 3.2 million barrels.” Nicole Friedman wrote.
Both gasoline and diesel futures are now at the lowest levels since 2009. From a fuel price management perspective, declining retail prices will mean decreased revenue, but if history repeats, increased fuels margins. However, during this season when retail fuel volumes are lowest, we will see retail fuel marketers sacrifice margin to gain volume where they can.
by John Keller | Jan 2, 2015 | Fuel Price Management, Fuel Price Optimization, Industry News, Retail Fuel Margins
The OPIS report today reported that the average US retail fuel margin started the new year at $0.335 per gallon. That margin is down $0.041 from last week, but a whopping $0.209 higher than the equivalent week last year when the average retail fuels margin was $0.126 per gallon.
The six week average was up $0.011 per gallon from last week and reached $0.321 per gallon.
Retail fuel prices across the US have been falling 99 days in a row, according to AAA. And there is no end in sight, with the cost of crude continuing to drop, and gasoline futures dropping as well.
What does this mean from a fuel price management perspective? It means these are the days of margins, when we need to make the best of the time given to us, knowing full well that the market cannot continue like this forever. Soon we’ll enter into the days of transition from winter to summer blends and scheduled refinery maintenance. Typically that means the season of wholesale cost increases and margin decreases.
We can make the best of these days by using fuel pricing software that allows us to react quickly in this volatile environment.
